Summary
The proposed EU Green Claims Directive aims to prevent greenwashing by requiring businesses to support their environmental claims with scientific evidence and obtain independent verification before communicating those claims to consumers. As the European Union tightens its rules on environmental marketing, manufacturers selling products in the EU will soon need to meet stricter requirements when making sustainability claims.
The European Parliament adopted the draft directive in March 2024, and the proposal is currently in the trilogue negotiation phase. If the European Union adopts the directive, EU member states will have two years to incorporate its provisions into national law. The new requirements are likely to take effect in 2027.
The Green Claims Directive aims to stop misleading environmental advertising
Many manufacturers today promote products using terms such as “sustainable,” “recyclable,” “climate neutral,” or statements like “packaging made from 30% recycled plastic.” Others advertise reductions in carbon emissions by comparing current products with earlier years.
Until now, companies have not needed to prove many voluntary environmental claims before using them in marketing. The European Union conducted a study in 2020 on environmental claims.
The study found that many environmental claims were vague, misleading, or unsupported by evidence. These findings raised concerns about consumers distinguishing genuine sustainability efforts from marketing claims.
The proposed Green Claims Directive addresses this issue through common rules across the European Union. The directive aims to provide consumers with reliable information for informed purchasing decisions. It also aims to increase confidence in products that deliver genuine environmental benefits.
The directive focuses on improving transparency rather than preventing companies from communicating sustainability efforts. Businesses making voluntary environmental claims will need to support those claims with clear evidence before presenting them to customers.
Key requirements under the proposed directive
- Environmental claims must be supported by scientific evidence.
- The rules apply to claims about products, services, or the company itself.
- Claims covered are voluntary environmental statements not already regulated by other EU laws.
- Independent accredited verification bodies must examine claims before they are published.
- Companies can only use approved environmental claims after receiving a certificate of conformity.
- The certificate will be recognised across all EU member states.
- Rules also apply to environmental labels to improve their reliability.
Which manufacturers are covered and how the verification system works
The proposed Green Claims Directive mainly applies to business-to-consumer (B2C) transactions. Businesses that sell products or services directly to consumers in the European Union must comply with the new requirements.
In principle, the directive applies to companies operating in the EU regardless of their size. It also covers small and medium-sized enterprises (SMEs), although the draft provides certain exemptions or simplified requirements for these businesses.
One of the biggest changes introduced by the proposal is the requirement for independent verification before environmental claims can be published. Rather than allowing businesses to make claims first and justify them later, companies will need approval in advance.
Accredited testing bodies will assess whether the environmental claim is supported by scientific evidence and meets the legal standards laid down in the directive. Only after successful verification will businesses receive a certificate confirming compliance.
This certificate will allow companies to use the approved environmental claim throughout the European Union, creating a common approach across member states.
The proposal also introduces rules covering environmental labels, often referred to as ecolabels. These measures aim to ensure that labels displayed on products provide reliable information instead of creating confusion for consumers.
The European Commission first presented the proposal in March 2023. The European Parliament adopted the draft at its first reading in March 2024. The Council later adopted its general approach in June 2024, and trilogue negotiations between the Parliament, Council and Commission began in January 2025.
If the European Union completes the legislative process, it is expected to give member states around two years to implement the directive into national law before the new rules become binding approximately one year later.
Penalties, related EU rules and existing restrictions on green claims
The proposed directive provides for penalties when companies fail to comply with its requirements. Individual EU member states will determine the exact nature and level of fines after implementing the legislation into their national legal systems.
Authorities may consider several factors when determining penalties. These include the seriousness of the infringement, whether the violation was intentional, whether similar offences have occurred repeatedly, and any financial benefit gained by the company.
FINCEN’s Battle Against Environmental Financial Crimes on Earth Day (22nd April)
Apart from financial penalties, businesses also face reputational risks. Proceedings involving misleading environmental claims are often reported publicly, which can affect consumer trust and brand image.
The proposal also allows consumers, environmental organisations, nature protection groups, consumer protection organisations, and competing businesses to report suspected unauthorised environmental claims to the relevant authorities.
Existing EU rules on environmental advertising
Another EU measure, known as the EmpCo Directive and formally titled the Directive on Empowering Consumers for the Green Transition Through Better Protection Against Unfair Practices and Better Information, also regulates environmental advertising.
The European Union published the EmpCo Directive on 6 March 2024 as part of the European Green Deal. EU member states must implement its requirements by 27 September 2026. Germany will incorporate these rules into its national law governing unfair competition.
The EmpCo Directive directly prohibits certain environmental advertising practices. One example is advertising climate neutrality when that claim relies only on carbon offsetting measures. Compared with these broader rules, the Green Claims Directive serves as the more specific legislation governing environmental claims.
Even before the Green Claims Directive becomes law, businesses are already expected to avoid misleading environmental advertising. Existing court decisions have established strict standards for such claims.
On 27 June 2024, a court ruled that unclear climate neutrality claims can mislead consumers. Companies must explain whether they achieve climate neutrality through emission reductions or carbon offsetting.
Some companies now reduce communication about their sustainability efforts because of increased regulatory scrutiny. Experts call this practice green hushing. Companies remain silent about environmental actions even when they implement them.
Studies cited alongside the proposal show that sustainability measures can increase company and brand value. The directive focuses on ensuring businesses make accurate, transparent, and evidence-based environmental claims.
